The long-term goal of this proposal is to understand a novel mechanism of peptide signaling in Gram-positive bacteria using Competence and Sporulation Factor (CSF) of Bacillus subtilis as a model system. CSF is a member of an emerging class of signaling peptides that function intracellularly. Previously, signaling peptides had been thought to function only through membrane receptors, due to the presence of peptidases inside the cell. However, our studies have shown that CSF, an unmodified five amino acid peptide, is transported into the cell where it functions intracellularly to regulate gene expression. Peptide signals, like CSF, are used by Gram-positive bacteria to monitor their population density (i.e. quorum sensing). Quorum sensing in bacteria regulates such medically important processes as virulence and biofilm development. Therefore, functions regulated by peptide signaling pathways in the medically important Gram-positive bacteria are potential drug targets. We hope that, by understanding the mechanism of signaling by CSF in B. subtilis, we will be able to identify additional intracellular functioning signaling peptides in other bacteria. We have proposed experiments to understand the mechanism of production and response to CSF. The precursor protein for CSF is secreted through the general Sec-dependent export pathway and then processed extracellularly. We have isolated a mutant that appears to be defective in this extracellular processing activity. We have proposed genetic and biochemical experiments to characterize the role of protein defective in this mutant in CSF production. Mature CSF is imported by a non-specific oligopeptide permease (Opp), homologues of which exist in many bacteria. Experiments are proposed to determine the binding affinity of CSF for Opp and whether other peptides compete with CSF for binding to Opp. Once inside the cell, CSF appears to have at least three intracellular receptors. We have proposed experiments to identify the intracellular receptors of CSF and to understand how CSF interacts with these receptors. CSF regulates the activity of two phosphatases that dephosphorylate response regulators. These phosphatases are intriguing as they show similarity to the widespread tetratrico peptide repeat (TPR) protein domain family. The proposed experiments should elucidate the mechanism of signaling by this novel class of intracellular function peptides.